Financial hardship and mental health: the role of psychological factors

Abstract

A review of the literature investigating the role of psychological factors in the relationship between financial hardship and mental health was completed. The review sought to identify which factors have been most consistently and reliably indicated, and the mechanisms by which these factors are proposed to contribute to the association between hardship and mental health. Although the review identified that a broad variety of factors have been investigated, skills related to personal agency and coping were most frequently and reliably associated with the relationship between financial hardship and mental health outcomes. Just over half of the studies reviewed concluded that the psychological factor investigated was either eroded by financial hardship, increasing vulnerability to mental health difficulties, or protected mental health by remaining intact despite the effects of financial hardship. The remaining studies found no such effect or did not analyse their data in a manner in which a mechanism of action could be identified. The methodological quality of the research included in the review was variable. The valid and reliable measurement of financial hardship, and conclusions regarding causation due to the use of predominantly cross-sectional design were areas of particular weakness.

In a longitudinal study the psychological factors of economic locus of control, self esteem, hope and shame were explored for their impact on the relationship between financial hardship and mental health. Participants completed measures of financial hardship, the psychological factors and measures of mental health at three times at three monthly intervals. A hierarchical regression analyses indicated that subjective financial hardship, hope and shame significantly predicted mental health outcomes. A mediation analyses demonstrated that hope mediated the relationship between subjective financial hardship and depression, stress and wellbeing; that shame mediated the relationship between subjective financial hardship and anxiety; and that neither shame nor hope mediated the relationship between subjective financial hardship and suicide ideation.

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ORCID for Nicholas Maguire: orcid.org/0000-0003-4295-8068

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